Stimulus loan could cut cost of bonds for Career Tech High School

Abilene ISD has been approved to help fund its proposed $25 million Career Tech High School through a low-interest ($13 million) bond through the federal stimulus program. The low-interest loan would reduce the amount of the proposed tax-rate increase for homeowners in Abilene ISD. Here’s what AISD thought homeowners would pay before and after the low-interest loan:

Effect on your taxes (Annually)

$50,000 Homestead

Before After

$5.91 $3.21

$75,000 Homestead

Before After

$10.84 $5.89

$100,000 Homestead

Before After

$15.76 $8.56

$150,000 Homestead

Before After

$25.12 $13.64

$200,000 Homestead

Before After

$34.48 $18.73

$250,000 Homestead

Before After

$43.83 $23.81

$300,000 Homestead

Before After

$53.19 28.89

Average Small Business in AISD

Before After

$90.61 $49.22

SOURCE: Abilene ISD

The Abilene school district has qualified for a federal stimulus loan that would almost cut in half the tax-rate increase needed to pay for a new Career Tech High School, school officials said Thursday.

Abilene Independent School District voters will decide on Nov. 3 whether to issue $25 million in bonds for a career high school at an undetermined location. Early voting begins Monday, and if approved, the school could open as early as January 2012.

The initial $25 million will still be needed, but the interest paid on that principle could be cut in half with the stimulus help.

Of the $25 million cost, $13 million would be covered by the federal stimulus Qualified School Construction Bond loan, which could have an interest rate as low as zero percent. Currently, school districts are getting interest rates between 4 percent and 5 percent on bonds.

As a result, the tax-rate increase needed to fund the proposed Career Tech High School would be reduced from 1.97 cents to 1.07 cents per $100, saving taxpayers an estimated $9 million in interest.

That means on a $100,000 homestead, if the bond issue passes, the annual dollar tax increase to fund the proposed Career Tech High School would be $8.56, a drop from the original estimation of $15.76, Abilene ISD officials said Thursday.

The $13 million would be paid back over 15 years. Estimates project the remaining $12 million would be financed at an interest rate of 4.75 percent and paid back over 20 years.

"It's like buying a car at zero interest — your payment is going to be lower," AISD Superintendent David Polnick said.

That would cut the total payback from about $43 million to about $34 million, said Keith Dowell, AISD's executive director of finance.

AISD wouldn't be "as responsible for as much interest," Polnick said. "Interest rates are low now, and this is going to make it even lower."

While the district would still have to pay back principal on the $25 million project, Polnick said the lower interest rates — and resulting savings — should make it more appealing for voters to approve financing the proposed Career Tech High School.

"This is good news for the taxpayers on their local school tax rate," Polnick said.

However, some who oppose the bond said recently at a roundtable discussion that any price tag is too high without more information about the school's location, logistics and recurring costs.

"I think they should have a well-developed plan before they ask for the money," said former ACU professor Ed Enzor.

According to Dowell, the stimulus loan's impact could be even better than the 1.07 cents per $100 valuation.

The district is basing that estimate on a loan payback of 1 percent on the $13 million aided with the stimulus package, Dowell said, noting Garland ISD has been able to receive zero interest with its stimulus loan.

Reducing the interest from 1 percent to zero percent on the $13 million portion would drop the tax rate increase needed to fund the Career Tech High School from 1.07 cents to .80 cents per $100 valuation, Dowell said.